DIC (formerly Dainippon Ink and Chemicals) Corporation of Japan may face difficulty in delisting the stock of its Indian subsidiary DIC India on its terms.

Reverse book-building The proposed offer from its Singapore-based investment arm DIC Asia Pacific Pte Ltd is likely to be done through the reverse book-building process. DIC Asia Pacific is willing to accept the equity shares of DIC India tendered in the delisting offer at a price of Rs 260 — the indicative offer price.

DIC Asia Pacific holds 71.75 per cent stake in the company; the rest is held by dispersed retail investors.

In the 28.25 per cent public shareholder category, only two individuals hold a little over 2 per cent each.

Since the announcement of the intention of delisting by the overseas promoters on November 22, the stock price has started rising and is currently hovering at Rs 358 a share.

Realistic valuation According to market insiders this is ample indication that there would be few takers even if the offer price is significantly revised upwards. Shriram Subramanian, MD of proxy advisory firm InGovern told Business Line : “If the promoters are serious about delisting they have to come out with a more realistic valuation of DIC India. The market prices before the announcement may not have been reflecting the true value of the company as investors in the counter seldom traded and held on to the stock for the long term,” he added.

A broking firm official said the 105-year-old global printing ink major, which has recently formulated a new management style called the “DIC way,” would be out of place if the intrinsic value of its business in India is lowered.

DIC set up a plant for lamination adhesive (related to packaging segment) in Bangalore last year at a cost of around Rs 29.17 crore. DIC India paid a dividend of Rs 4 a share (FY2011) of face value Rs 10 each.

> jayanta.mallick@thehindu.co.in

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